Allister Heath in the Home-Owner-Ist propaganda sheet City AM points out that hyper-low interest rates are nowhere near as popular - or as beneficial - as the politicians always make out. In truth, they are kept low to prop up banks/bankers and house prices (as well as share prices), so this is just the usual transfer of wealth to the usual suspects.
On balance, polls show that more people prefer higher, rather than lower, rates. One reason for this is that more mortgages are being paid off than taken up. In fact, 47 per cent of homeowners already own their property outright, according to research from Hometrack. If current trends continue, by 2014/15 there will be more outright owners than those with a mortgage.
But he falls at the final hurdle:
The majority of these outright owners will be net savers, and hence will see themselves as losers from low rates (of course, cheap money tends to inflate house prices, boosting all homeowners’ wealth, but those without a mortgage often don’t see it that way).
How does transferring wealth from savers to land speculators boost wealth? It does no such thing; it discourages saving, misallocates capital and impoverishes the next generation of home buyers, that's all. Haven't the last few years taught us, yet again, that land price bubbles are not 'wealth', they are Fool's Gold?
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